The bank hereby agrees to allow the Republic interest at the rate of two per centum per annum on the balance of its account, such interest to be credited semiannually. The notes shall be executed in English, and if desired in Spanish, but the English wording shall govern and be acceptable to the bank. The notes shall bear the facsimile signatures of those authorized to sign on behalf of the Republic and shall be certified to by the National City Bank of New York. All notes as redeemed shall be cancelled by the bank and surrendered to the Dominican Republic. File No. 839.51/927a. The Secretary of State to the American Minister. [Telegram-Paraphrase.] DEPARTMENT OF STATE, Washington, January 7, 1913. A representative of the National City Bank of New York, Mr. R. L. Farnham, has presented to the Department the following draft contract which he desired the Department to cable to you for Michelena, who will receive instructions to lay it before the Dominican Government. [Here follows the text of the draft contract, in the same words as those of the inclosure to the next preceding communication.] You will make it clear to the Dominican Government, in case Michelena presents the contract, that the Department does not indicate, by transmitting it, that it should be given preference over any more favorable offer, but has sent it merely as an accommodation to the bankers. KNOX. File No. 839.51/937. The American Minister to the Secretary of State. [Telegram-Paraphrase.] AMERICAN LEGATION, Santo Domingo, January 22, 1913. The National City Bank's loan proposition has been accepted by the Dominican Government on exactly the terms given in your telegram of the 7th instant, except 974 instead of 961. File No. 839.51/937. RUSSELL. The Secretary of State to the American Minister. [Telegram-Paraphrase.] DEPARTMENT OF STATE, Washington, January 30, 1913. Jarvis represents to the Insular Bureau that the National City Bank contract would pay in excess of 7 per cent, according to his calculations, and is therefore illegal, under the specific congressional authorization. The matter will be studied and settled with all possible promptness. File No. 839.51/950. The Chairman of the National Bank of Santo Domingo to the Secretary of State. [Telegram.] NEW YORK, February 7, 1913. As Chairman of the National Bank of Santo Domingo, a financial institution established by myself and associates as the direct result of your announced policy of encouragement of commerce of and for the United States, I beg to call your attention to our bid, made in good faith at the proper time. No other bidder appearing in the field, I am now prepared to say that the Bank will redeem notes every three months if this seems desirable to the Government. I have the most implicit faith in you personally and have had from all the officers of the Department only courteous and honorable treatment in all dealings with your Department. SAMUEL M. JARVIS. File No. 839.51/950. The Secretary of State to the Chairman of the National Bank of Santo Domingo. [Telegram.] DEPARTMENT OF STATE, Washington, February 12, 1913. Referring to your telegram of February 7 and previous correspondence in regard to the making of a loan of $1,500,000 to the Dominican Government, I desire to advise you that from the information before this Department it appears that in the competition to obtain this loan proposals were submitted to the Dominican Government by two rival American-owned concerns-the National Bank of Santo Domingo and the National City Bank of New York City-and that the Dominican Government has decided to accept the proposal of the National City Bank of New York. Both proposals appear to be within the requirements as they are known to this Department, and from a calculation made by the officers of the Insular Bureau of the War Department it appears that the proposal of the National City Bank of New York is somewhat more favorable to the Dominican Government. In view of all the facts and circumstances as known to the Department there appears to be no ground that would call for or justify the Department in any interference in the matter of the awarding of this contract. ΚΝΟΣ. File No. 839.51/950. The Secretary of State to the American Minister. [Telegram-Paraphrase.] DEPARTMENT OF STATE, Washington, February 12, 1913. The Department must know the exact text of the loan agreement and the coupon note or bond before finally agreeing to the contract ing of the loan. If the contract is the one already communicated through the Department, cable any differences that may exist in the text as signed from the text as cabled to you; if it is some other form of contract, cable full text; also cable text of coupon note or bond. ΚΝΟΣ. File No. 839.51/954. The American Minister to the Secretary of State. [Telegram-Paraphrase.] AMERICAN LEGATION. Santo Domingo, February 13, 1913. The National City Bank loan agreement now awaiting conclusion is exactly the same as cabled to me in your January 7 excepting the proper changes in the preamble and the rate, which was named in the cable as received here as 100 instead of 97. Additional clauses are as follows: S. All advances and disbursements made to the Dominican Republic under this loan shall be made by means of checks or orders countersigned as a proper expenditure by the American Minister or the Secretary of Legation of the United States and Mr. J. H. Edwards, Deputy General Receiver of Dominican Customs, or such other person as the General Receiver of Dominican Customs may designate. 9. For the purposes and operation of this loan any advice or communication from the National City Bank of New York shall be considered valid if made in writing addressed to the (translation) Secretaryship of State for Finance and Commerce of the Dominican Republic (end of translation), Santo Domingo City, and delivered at the office of the Secretary of Finance and Commerce through the American Legation or the Consulate General of the United States of America in Santo Domingo City, or in any other way. Any advice or communication from the Dominican Republic shall likewise be considered valid if made in writing, addressed to the National City Bank of New York, No. 55 Wall Street, New York City, and delivered at its office through the Dominican Consulate General in New York City, or in any other way. 10. All accounts pertaining to the operation of this contract shall be kept by the National City Bank of New York in United States currency, and said bank shall submit to the Dominican Republic statements of said accounts covering the periods ending June 30 and December 31 of each year. The accounts herein referred to may be transmitted to the Dominican Re public through any of the channels indicated in paragraph 9, and shall stand as approved and accepted by the Dominican Republic if within ninety days after rendition of such accounts no objection thereto or criticism thereof is made through any of the channels mentioned in said paragraph 9. 11. This contract shall be approved and endorsed by the Envoy Extraordinary and Minister Plenipotentiary of the United States of America to the Dominican Republic, on behalf of his Government. 12. This contract shall be executed in both the English and Spanish languages, but the English text shall govern. The National City Bank's representative here states that the coupon notes are not ready; they will bear the facsimile signature of the Dominican Minister of Finance and the actual signature of Ramón Lovatón, Dominican Senator, who will sign them in New York, where they are being prepared. RUSSELL. File No. 839.51/957. The American Minister to the Secretary of State. [Telegram-Paraphrase.] AMERICAN LEGATION. Santo Domingo, February 18, 1913. The Government is in desperate straits unless some kind of loan is immediately consummated. The President has been compelled to pay out large sums for the expenses of the late war; these were proper expenses and the sums used to pay them were advanced by Michelena, to be charged to the loan. But owing to the uncertainty about the conclusion of the loan, Michelena absolutely refuses to advance another dollar. File No. 839.51/957. RUSSELL. The Secretary of State to the American Minister. [Telegram-Paraphrase.] DEPARTMENT OF STATE, Washington, February 19, 1913. The Department assumes that advance has already been made of $300,000 under the terms indicated in Department's December 18. If the Dominican Government anticipates the need of an additional advance before the conclusion of the loan, the Department hereby consents thereto, if not in excess of $200,000 and if under the terms recited in Department's December 18, to be refunded out of the proceeds of the permanent loan. In regard to the protest of the National Bank of Santo Domingo, you are informed that the Department has concluded its study of the matter and has no observations to offer to the Dominican Government. Jarvis has been informed that both proposals seem to be within the legal requirements, and that the initial adoption of a loan contract to be submitted for this Government's consent, and acceptance of the proposal most advantageous to the Dominican Government, are matters for that Government's determination, and the Department does not feel called upon to interfere as between rival American bidders. The Department is uncertain whether or not your February 13 means that the National City Bank proposal has been finally and irrevocably accepted. If it has been so accepted and when the Department has been so advised, it will promptly inform you of a minor change respecting procedure which it has to suggest as preliminary to its consent. Meantime cable text of preamble. File No. 839.51/961. The American Minister to the Secretary of State. [Telegrams Paraphrases.] KNOX. AMERICAN LEGATION, Santo Domingo, February 21, 1913. The Dominican Government has ratified to me its final and irrevocable acceptance of the proposal of the National City Bank of New York, after having duly considered the protest of the National Bank of Santo Domingo. The following is the text of the preamble of the contract: Whereas the National Congress of the Dominican Republic has authorized, by a law approved by the President on December 14, 1912, the negotiation of a loan not to exceed $1,500,000 gold, at a rate of interest not to exceed 7 per centum per annum; and, considering that of the proposals submitted by various bankers for this loan the Dominican Government has accepted the proposal of the National City Bank of New York, an incorporated company with its principal domicile in the City of New York, United States of America, at No. 55 Wall Street The Dominican Republic, represented in this contract by its Secretary of State for Finance and Commerce, party of the first part, and the National City Bank of New York, represented, by virtue of a special authorization transmitted by cable on January 23, 1913, by Mr. Santiago Michelena, banking concern, domiciled in the City of Santo Domingo, Dominican Republic, party of the second part, hereby agree and contract as follows: RUSSELL. File No. 839.51/960. AMERICAN LEGATION, Santo Domingo, February 23, 1913. The contract was signed yesterday and awaits my endorsement. Will the change mentioned in your February 19 necessitate a new contract, or can I, subject to changes you make, endorse the present contract? File No. 839.51/962. RUSSELL. AMERICAN LEGATION, Santo Domingo, February 24, 1913. I am requested to inform you that the Dominican Government has definitively accepted the proposal of the National City Bank, after seriously considering all the objections raised by the National Bank of Santo Domingo. Your instructions have been strictly complied with and I have declared on all occasions that my Government leaves the Dominican Government absolutely free to choose between the two propositions. RUSSELL. File No. 839.51/962. The Secretary of State to the American Minister. [Telegram-Paraphrase.] DEPARTMENT OF STATE, Washington, February 26, 1913. In regard to your February 23, the Department feels that the provision for the endorsement by the American Minister should be stricken out of the loan contract. As to your February 21 and February 24, with the modification made as stated in the foregoing paragraph, this Government, in pursuance of the terms of the convention between the two Governments of February 8, 1907, stands ready to agree with the Government of the |